Domicile refers to the place you call home permanently. Your domicile is important for legal purposes such as paying taxes, voting, and claiming benefits.1. a dwelling place : place of residence : home 2. Law a : a person's fixed, permanent, and principal home for legal purposes Domicile is a fancy word for the place where you live. Whether it's a mansion on 5th Avenue or a tee-pee in the desert, if you live in it, it's your domicile. A residency audit is when the tax agency looks at where you live to ensure that you are paying the right state and local taxes. A permanent legal residence. Simply put, your domicile is your home—the state you consider your permanent place of residence. Domicile is intended to be permanent rather than temporary, whereas residence means living in a particular locality and requires mere physical presence.